Global markets climbed on Tuesday after fresh data from Beijing confirmed that China’s economy expanded by 5.2% in the second quarter of 2025 a figure that matched analyst expectations and temporarily soothed investor nerves amid continued global trade tensions.

The growth, slightly below the 5.4% recorded in the first quarter, was driven by a sharp increase in exports as Chinese firms accelerated shipments to the United States ahead of potentially punitive tariffs threatened by former U.S. President Donald Trump.

According to China’s National Bureau of Statistics, June exports beat forecasts, reflecting a recovery in shipments to the U.S. and helping offset sluggish domestic demand. Industrial output also came in above projections. However, retail sales grew by just 4.8%, missing Bloomberg’s estimate and underscoring Beijing’s struggle to ignite consumer spending despite a series of economic stimulus initiatives.

“Recent efforts to boost spending, such as the broadening of the consumer goods trade-in scheme earlier this year, did temporarily lift retail sales,” said Sarah Tan, an economist with Moody’s Analytics. “However, this support proved unsustainable, with funding reportedly drying up in several provinces.”

Trade Tensions Linger as Trump Ups Pressure

Tuesday’s market optimism came despite escalating rhetoric from Donald Trump, who has warned of sweeping 100% tariffs on countries continuing trade with Russia a veiled shot at China and other nations maintaining commercial ties with Moscow.

Trump has also threatened a barrage of new duties: 30% tariffs on imports from Mexico and the European Union unless new trade agreements are reached by August 1. The former U.S. leader added fresh fuel to his protectionist agenda by imposing anti-dumping duties on fresh tomatoes from Mexico, citing unfair trade practices.

Still, market analysts dismissed the threats as typical Trump-era negotiation tactics. “Investors have seen this playbook before,” said one trader in Hong Kong. “Markets are betting that these are high-stakes bluffs aimed at deal-making, not actual policy shifts.”

Markets React Positively

The response from global equities was broadly upbeat. In Asia, the Hang Seng Index in Hong Kong rose 1.6%, while Tokyo’s Nikkei added 0.6%. Markets in Seoul, Sydney, Singapore, Mumbai, and Jakarta also closed higher. However, Shanghai’s Composite Index dipped 0.4%, reflecting lingering caution in China’s domestic market.

In Europe, London’s FTSE 100 edged up 0.1%, with Frankfurt and Paris posting similar modest gains. U.S. stock futures also pointed to a stronger open, bolstered by news that Nvidia will resume sales of its H20 artificial intelligence chips to Chinese buyers after the U.S. government eased licensing restrictions.

On Wall Street, the Nasdaq Composite closed at another all-time high on Monday, driven by tech momentum and renewed confidence in AI-related stocks.

Currency and Commodities Snapshot

• Euro/Dollar: $1.1690 (up from $1.1670)
• Pound/Dollar: $1.3447 (up from $1.3428)
• Dollar/Yen: 147.65 (down from 147.77)
• Euro/Pound: 86.94 pence (up from 86.88)

Meanwhile, oil prices slipped amid concerns over global demand:

• West Texas Intermediate fell 0.9% to $66.37 per barrel
• Brent Crude declined 0.8% to $68.66 per barrel

Bitcoin Pulls Back After Record High

After briefly surging above $123,200 on Monday fuelled by speculation over U.S. regulatory reforms for digital assets Bitcoin retreated slightly but remains near historic highs.

Outlook: Eyes on Consumer Demand, Trade Developments

While China appears on track to meet its full-year growth target, analysts say further gains could be threatened by continued weakness in consumer spending and heightened geopolitical risk.

“China remains on track to hit this year’s growth target, though a slowdown could be on the way,” said Lynn Song, chief economist for Greater China at ING.

As global markets await clarity on Trump’s next moves and the outcome of ongoing trade talks, investors are cautiously optimistic buoyed for now by solid tech earnings, diplomatic overtures between Beijing and Washington, and the belief that tariff threats may not materialize.